Innovative climate risk insurance wanted
Are you looking for financial support to implement your climate risk insurance product? The ISF offers up to 2.5m EUR!
The 4th Call for Proposals of the ISF is open until 29 January 2021. Learn more about the ISF’s mandate, eligibility and financial criteria, and register for the Q&A sessions on 14 and 19 January 2021 via firstname.lastname@example.org
In light of the ongoing Covid-19 pandemic, a holistic approach on disaster relief and preparedness seems more vital than ever in order to compensate (in-)direct effects on economic development and growth of countries that are recipients of Official Development Assistance (ODA). Thus, the ISF especially welcomes project concepts targeting the sectors most vulnerable to effects of the pandemic, such as critical infrastructure, emergency relief and financial support of micro, small and medium-sized enterprises (MSMEs).
The ISF supports the development of innovative and sustainable climate risk insurance products in countries of Latin America, Africa and Asia eligible to receive ODA with grand-based co-funding in order to improve the resilience of poor and vulnerable people to extreme weather events. Since its establishment in 2019, the Calls for Proposals generated worldwide interest from the private and public sector as well as civil society. To date, the Fund has received almost 120 applications for co-financing product development of innovative climate risk insurance solutions. So far, already six Grant Agreements for product development support have been signed, spanning from Latin America to South-East Asia.
Development of innovative climate risk insurance expanded
The Federal Ministry for Economic Cooperation and Development (BMZ) increased the allocation of funds to the InsuResilience Solutions Fund (ISF). On its behalf, KfW and Frankfurt School of Finance and Management extended their cooperation agreement and signed the second phase of the ISF. This allows the ISF to continue the promotion and research activities for climate risk insurances.
Strengthening climate-resilient development and transformation in Viet Nam
Applying risk analysis tools and models developed by the insurance sector, the ISF offers climate risk analyses that provide governments, businesses and civil society with important data and information to become more proactive risk managers. Based on the open-source and probabilistic modelling CLIMADA, ISF conducted a fast-track CLIMADA analysis for Viet Nam in a research cooperation with the reinsurer AXA Climate and ETH Zurich. The study assessed the current and future climate impacts faced by Viet Nam due to Tropical Cyclones, specifically wind and surge. The expected impact of wind and storm surge risk was assessed focusing on three categories of assets: residential houses, agriculture, and people. Based on their respective exposure to climate risks different adaptation measures including physical adaptation measures (such as mangrove rehabilitation) as well as financial adaptation via insurance were identified and evaluated with regard to their respective cost-benefits. The results directly benefit decision makers in the region to further develop the climate adaptation strategy and provide a vivid example of the possibilities and advantages of the CLIMADA platform. A summary of the results will soon be available on the ISF website.
- Day 3 of the InsuResilience Annual Forum featured a case study session on Viet Nam including the presentation of CLIMADA by Annette Detken, Head of InsuResilience Solutions Fund Management. Access the recording: Part 1, Part 2
Prefeasibility study for a parametric typhoon insurance in the Philippines
In preparation for the development of a parametric typhoon insurance scheme for the Filipino retail market, the ISF funded a preparatory study by CelsiusPro and MAA General Assurance Philippines (MAA). The objective of the study was to get a detailed understanding about the insurance market situation, potential target groups and partners, available data and possible design options to develop a concept for an index-based typhoon insurance product. The insurance product is targeted at the low-income sector, aiming to improve the resilience of poor and vulnerable people in the Philippines against extreme weather events.
Looking back on this trying year 2020, supporting poor and vulnerable people around the globe has become even more vital. Under these circumstances, the ISF is very glad to announce that in 2020 five Grant Agreements have been signed with partnerships implementing climate risk insurance projects in Colombia, Peru, Bangladesh, Ghana and Tanzania with a total volume of 5.8m EUR.